Whichever form of bankruptcy chosen‚ both are designed to help consumers. The laws are set up to give people a chance to get out from the debt that is holding them back. In Chapter 7‚ consumers who owe a lot of money to credit card companies‚ banks and even hospitals for medical bills‚ but who don’t have a job and have few assets‚ can have that debt released once the bankruptcy process is complete.

In Chapter 13 bankruptcy‚ it works a little differently. This is bankruptcy for people who do have jobs‚ but still have racked up quite a bit of debt. If they have assets they want to protect‚ such as a house‚ vehicles and other valuables‚ they can keep those and still file for bankruptcy. The difference is that they would be required to make monthly payments‚ usually for 3 to 5 years‚ to pay off a portion of the debt. In Chapter 7‚ it’s possible that assets will be protected‚ but there are exemptions.

What bankruptcy can do is free consumers from the lender’s grasp. By clearing the debt‚ they don’t have to worry about those hidden fees and notched-up interest rates that make plastic deadly.

According to a recent survey reported by Reuters‚ many people are struggling and can’t get by.

According to WOW‚ Wider Opportunities for Women‚ 45 percent of U.S. residents live in households that are barely getting by. That equates to 39 percent of adults and 55 percent of children.

The study was conducted comparing 2009 pre-tax incomes to essentials developed by researchers and economists. The study found that‚ for a family of one worker‚ housing costs are about $700 and food $250 per month. For a family with two workers‚ it’s $820 for housing and $700 for food. The study didn’t include vacations‚ hobbies‚ tuition and other non-essentials.

Some are concerned that because a group of lawmakers weren’t able to agree to a $1.2 trillion reduction in debt over the next 10 years that unemployment and other benefits for those who are struggling could get cut.

According to research‚ 15 percent of the country lives in poverty‚ which is an annual income of $22‚314 for a family of four. Scores of others live just above that line‚ as well.

And many of those people are struggling to try to live off credit. When there are few resources‚ a credit card can seem like a life raft. But when the fees kick in and interest rates spike‚ it can make tough times even worse. Bankruptcy can help when there are few other alternatives.

Nader‚ Naraghi & Woodcock‚ APLC will provide a free consultation to help guide you in making a decision that works for you. In Encino‚ Glendale‚ and San Fernando Valley‚ just call (800) 568-0707.

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